Uzbekistan has only begun to make independent steps in global economic processes. Along with Central Asian countries, Kazakhstan, Kyrgyzstan, Turkmenistan and Tajikistan, Uzbekistan’s economy and economic structure is pretty young, thus vulnerable to any unseen exogenous repercussions. We have already seen that how the Mexican Tequila crisis in 1994, the Asian crisis in 1997-98, the Russian crisis (even it was the leftover contagion from the Asian crisis) in 1998 and recent Kazakhstan real-estate crisis in summer of 2007 happened. It easy to see if we look behind capital flows. Capital flows have been heartache and headache for an economy for the last two decades. They are so mobile and volatile that can bear vicious ebbs and flow in no time at all. However, it is necessary to remember, that today it is difficult to speak of the economy of any country as about of separate island. Foreign Direct Investment is very necessary somehow, at least theoretically, to boost the economies of Central Asia. But there should be proper balance and policies to make the most of FDI inflows. An enchanted economy by enormous FDI inflows is exposed to very huge risk which might end up even with crisis!

capital inflow, emerging economy, crony capitalism

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